Billionaire shale pioneer Harold Hamm’s Continental Resources Inc signed agreements to buy half of an Argentine shale oil firm owned by Mercuria Energy Group, with the firms promising more than US$4 billion of investment to expand production.
Mercuria and Continental will become 50-50 joint venture partners in Phoenix Global Resources, the companies said on Thursday while announcing plans to treble Phoenix’s output to over 100,000 barrels of oil equivalent in the next five years. The combination will also add shale oil interests from José Luis Manzano’s Integra Capital, they said.
It’s the latest investment in Argentine shale oil from US investors this month after tech billionaire Peter Thiel reported a sizeable stake in Vista Energy SAB. Continental CEO Doug Lawler touted reforms from President Javier Milei, a Donald Trump ally on the international stage, as “ultimately helping pave the way for this significant partnership.”
Milei’s free-market reforms are helping drive the world’s fastest-growing shale boom in Argentina’s Vaca Muerta formation, after years of government controls stifled development.
Trading house Mercuria started its investment in Argentine shale in 2017 when it formed Phoenix through a listed oil producer which it later took private. The company is known as one of the biggest independent traders of oil and gas, owned mostly by co-founders Marco Dunand and Daniel Jaeggi.
Earlier this year, it also reached a US$1.4-billion deal to buy one of Argentina’s biggest oil refineries and a network of gas stations.
Continental and Phoenix partnered in an auction this week for exploration licences in the Vaca Muerta, bidding for six blocks. Continental is also working with Mercuria Americas to build a natural gas-fired power plant in the Permian Basin of West Texas.
Continental last year became the first independent US shale producer to venture into Argentina, buying assets from local driller Pluspetrol SA. In January, it bought stakes in blocks operated by Pan American Energy Group, which is half-owned by BP Plc.
Chevron Corp recently decided to develop more acreage in the Vaca Muerta thanks to a Milei initiative that provides tax cuts and other benefits.
by Archie Hunter, Bloomberg
Comments